ASIC has announced the ING Bank will compensate Living Super customers following potentially misleading statements about costs and fees.
ING Bank, as the promoter and investment manager of Living Super, will compensate around 24,500 customers by a total of approximately $5.38 million after ASIC raised concerns.
“In particular, ASIC was concerned that ING Bank promoted Living Super, between March 2015 and September 2016, as having ‘No Fees’ for the ‘Cash Investment Option’, ‘No Investment and Administration fees’ for the ‘Balanced Option’ and having low fees options without making it clear that customers were paid a lower interest rate on the cash portion invested with ING Bank than the rate paid by ING Bank to its Saving Maximiser customers for the relevant investment options,” said a statement by ASIC.
“ING Bank has told ASIC that it will no longer be promoting Living Super based on No Fees or No Investment and Administration Fee. It has made changes to its internal policies and procedures to help ensure that similar potentially misleading promotions are not undertaken.”
“ASIC also expressed disappointment that ING Bank was promoting Living Super using product inducements to clients separate from the superannuation product such as cash payments. ASIC observes that promotions of this type are a bad practice that may encourage decisions to be made on the basis of short term considerations that may not reflect the needs of a member. ING Bank has advised ASIC that it will stop offering separate product inducements in relation to Living Super.”
“This action reflects ASIC’s ongoing focus on the disclosure of fees and costs in superannuation,” said ASIC Commissioner Greg Tanzer.
“Consumers need to be able to make informed decisions about their superannuation and managed investments, based on accurate and consistent fees and costs disclosure.”
“Promotion of superannuation products based on low or no fees can be very influential on consumers. This makes it very important to ensure any such promotion is not potentially misleading by reducing the benefits consumers receive in exchange for the no fees or low fees features.”
ASIC said that affected Living Super member will not have to do anything to receive the compensation and acknowledged the “cooperative approach” taken by ING Bank and the trustee of Living Super.